Hong Kong growth falters under 'one country, two systems' Chinese-style democracy

Few will lament the passing of Tung Chee-hwa - the jowly former shipping magnate who spent eight turbulent years in Hong Kong's top job as the territory's first post-colonial appointee.

Not even Beijing's central government is sorry to see him go. But as career bureaucrat Donald Tsang steps up to claim the top job, the mainland authorities have made it clear they are unwilling to rescind any control gained since the 1997 handover. That the new chief executive will have a truncated tenure is in itself a matter of concern. Not only for those calling for increased democracy in the territory, but also in terms of what it says about China's attitude to Taiwan.

Mr Tsang understands that what happens in Hong Kong is indicative of a push by China to bring its rebellious neighbour back into the fold.

During a recent news conference, according to the Los Angeles Times, Tsang said that he faced two challenges: to regain Beijing's confidence, and to calm pro-democracy critics. He also said that he “would spare no effort” to help reunite the mainland and Taiwan - divided since the 1949 civil war.

It's no secret that Beijing authorities look upon Hong Kong's “one country, two systems” formula as a possible model for Taiwan's return to China. This is why the mass protests that have occurred two years running, in 2003 and 2004, helped to bring about Tung Chee-hwa's demise.

For Chinese authorities keen to herald the virtues of the formula, these noisy protests where hundreds of thousands of people took to the streets could not have come at a worse time. No matter that many of those protesting were angry about local issues - a stagnating economy, relatively high unemployment and attacks on human rights - rather than China's perceived meddling in the territory's affairs.

Half a million people marched on July 1 last year and I was there to witness it. Despite minimal coverage in the Australian press, these mass demonstrations were seen across Asia as symptomatic of a broader pro-democratic push in the region. Not only within Hong Kong, the city of 6.9 million best known for its shopping festivals and Jackie Chan action movies, but also potentially within China itself. During last year's rally for example those calling for democracy in Hong Kong also called for political change on the mainland for the first time.

In the weeks leading up to the rally six words were on everybody's lips. The complex diplomatic ballet over the slogan deemed “sensitive” to Beijing illustrates how the much-lauded independence of the two party system is often little more than a chimera. The slogan? “Return the power to the people”.

Experts on TV panels analysed the best way to paraphrase the slogan so as to not offend Beijing. The pro-Beijing politician, Tsang Yok-sing asked: "Why not respect their (the mainland authorities') feelings?" While a few pro-democracy politicians and trade unionists suggested using “positive” slogans like, “We love Hong Kong” instead.

When eminent pro-democracy campaigner Martin Lee said that despite Hong Kong's need for democracy, it did not mean the two states should be like “fire and water” I contacted Shiu Sin-por, executive director of a pro-Beijing think tank to find out the reasons for the controversy.

"The Central Government is sensitive about this because in the Cultural Revolution the slogan was used by leftists trying to seize control of the government," Mr Shiu said. "Ultimately some marchers will use it, some won't."

But the decision to limit the term of Hong Kong's next chief executive to two, rather than five years as spelled out in the territory's constitution - the Basic Law - indicates these fears about “offending” Beijing are an ongoing concern.